• If you are wondering whether Skyworks Solutions stock offers good value at today's price, you are not alone. The answer depends on which valuation lens you use.
• Skyworks Solutions last closed at US$67.71, with the share price up 5.1% year to date but down 13.0% over the past month and down 5.3% over the past year, which signals shifting market expectations and changing perceptions of risk.
• Recent coverage has focused on Skyworks Solutions in the context of the broader semiconductor sector, with attention on how demand trends and supply conditions may influence sentiment toward the stock. These stories provide useful background for understanding why the share price has declined 11.1% over the past week and 32.8% over three years, as well as 59.1% over five years.
• On Simply Wall St's valuation checks, Skyworks Solutions scores 3 out of 6. The rest of this article will break down what different valuation approaches say about the stock and point to an even richer way to think about value at the end.

Approach 1: Skyworks Solutions Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow, or DCF, model estimates what a stock might be worth by projecting the company’s future cash flows and discounting them back to today’s value. For Skyworks Solutions, this uses a 2 Stage Free Cash Flow to Equity model, which focuses on cash available to shareholders after expenses and investments.

Skyworks Solutions currently generates trailing twelve month free cash flow of about $740.2 million. Analysts and extrapolated estimates, as used by Simply Wall St, project free cash flow of $854.0 million for 2030, with intermediate annual projections between 2026 and 2035 that are discounted back to reflect today’s dollars.

When all these projected cash flows are added and discounted, the DCF model suggests an intrinsic value of about $60.79 per share. Compared with the recent share price of $67.71, this implies the stock is around 11.4% above the DCF estimate. This indicates that, based on this cash flow view, Skyworks Solutions appears to be trading at a premium.

Result: OVERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Skyworks Solutions may be overvalued by 11.4%. Discover 42 high quality undervalued stocks or create your own screener to find better value opportunities.

Approach 2: Skyworks Solutions Price vs Earnings (P/E)

For a profitable company like Skyworks Solutions, the P/E ratio is a useful way to relate what you pay for the stock to the earnings it generates. It helps you see how many dollars investors are currently willing to pay for each dollar of earnings.

What counts as a reasonable P/E depends on factors such as growth expectations and perceived risk. Higher expected earnings growth or lower risk can support a higher P/E, while slower growth or higher risk usually calls for a lower multiple. Skyworks Solutions currently trades on a P/E of 28.19x, compared with a Semiconductor industry average of about 72.98x and a peer average of 41.05x.

Simply Wall St’s Fair Ratio framework estimates what a company’s P/E might be given its earnings growth profile, industry, profit margins, market cap and risk factors. For Skyworks Solutions, this Fair Ratio is 34.61x. This stock specific yardstick can be more helpful than broad peer or industry comparisons because it adjusts for differences in quality, size and risk. Since the current P/E of 28.19x is below the Fair Ratio of 34.61x by a clear margin, the shares appear inexpensive on this earnings based view.

Result: UNDERVALUED

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Upgrade Your Decision Making: Choose your Skyworks Solutions Narrative

Earlier we mentioned that there is an even better way to understand valuation, so here is Narratives, a simple way for you to attach your own story about Skyworks Solutions to the numbers, by linking what you believe about its customers, products, risks and opportunities to a financial forecast and then to a fair value estimate.

On Simply Wall St’s Community page, Narratives let you set assumptions for future revenue, earnings and margins, so you can compare your Fair Value with the current price and decide whether Skyworks Solutions looks attractive, expensive or somewhere in between based on your own view.

Because Narratives are updated as new earnings, guidance or news arrive, your Fair Value view can adjust automatically rather than sitting frozen in a static model.

For example, one Skyworks Solutions Narrative on the bearish end uses assumptions that line up with a Fair Value of about US$57.33, while a more optimistic Narrative on the bullish side uses different revenue and margin assumptions to reach a Fair Value of about US$85.00. Seeing that spread helps you decide which story, and which Fair Value, feels closer to your own expectations before you act.

For Skyworks Solutions, however, we will make it really easy for you with previews of two leading Skyworks Solutions Narratives:

These give you a ready-made bullish and more cautious storyline, each tied to specific revenue, margin and valuation assumptions, so you can see which one feels closer to your own view before you build or adjust anything yourself.

Fair value used in this bullish Narrative: US$85.00 per share.

At a last close of US$67.71, this view treats Skyworks Solutions as about 20.4% below that fair value reference.

Revenue growth assumption used: 5.79% a year.

• Assumes faster RF content growth from 5G and AI related upgrades, plus broader IoT and automotive demand, can support higher revenue and margin expansion than the current consensus view.
• Expects manufacturing consolidation and onshoring to improve efficiency and free cash flow over time, with Broad Markets contributing a larger share of earnings.
• Sees a fair value of US$85.00 built on higher earnings by 2029 and a future P/E of 22.3x, while acknowledging meaningful customer concentration and smartphone cycle risks.

Fair value used in this more cautious Narrative: US$67.21 per share.

At a last close of US$67.71, this view treats Skyworks Solutions as about 0.7% above that fair value reference.

Revenue growth assumption used: 2.17% a year.

• Builds in slower revenue growth and only modest margin improvement, with a large share of earnings still tied to mobile handsets and one key customer.
• Assumes diversification into automotive and IoT helps, but remains too small in the near term to transform overall growth or reduce concentration risk quickly.
• Uses a consensus style fair value of about US$67.21 based on earnings of US$470.4 million by 2029 and a future P/E of 29.5x, with factory consolidation and competition flagged as important execution risks.

If you want to see how other investors are connecting these kinds of assumptions to their own fair value ranges for Skyworks Solutions, and then track how those views change as new data comes through, See what the community is saying about Skyworks Solutions.

Do you think there's more to the story for Skyworks Solutions? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.